U.S., EU Seek Cancun Blueprint

Trade officials said they would settle for a plan to reduce certain subsidies and tariffs in Cancun, a signal that big differences still plague the talks.

WASHINGTON — The top trade chiefs of the U.S. and European Union said they would settle for blueprints for reducing subsidies and tariffs on agriculture products and industrial goods in Cancun, signaling that wide differences still plague the global trade talks.

U.S. Trade Representative Robert Zoellick and European Union Trade Commissioner Pascal Lamy said Thursday they will consider a crucial meeting in Cancun, Mexico, next week a success if 146 countries reach a consensus on skeletal frameworks for opening markets, even without any of the details.

“We have to move the whole negotiations approximately on the 50 percent line [in Cancun],” said Lamy, addressing a trade forum via satellite, which was sponsored by Roll Call at the Ritz-Carlton here. “We have to agree on a basic framework in Cancun before we can discuss the fine print of the numbers on agriculture or industrial goods.”

Despite months of intense side meetings leading up to the halfway point of the so-called Doha Round of global trade talks, trade envoys have failed to reach a broad consensus on concrete proposals on tariff and subsidy elimination in the politically sensitive areas of agriculture and industrial goods.

The Doha Round was launched by the World Trade Organization in November 2001, aiming to create new trading rules in a global accord by early 2005. Developed countries, led by the U.S. and the nations of the European Union, are attempting to push forward the Doha Round in Cancun to ensure the talks stay on track to conclude by January 2005.

Both Lamy and Zoellick are hoping a deal reached in the WTO last week to allow poor countries to import cheap versions of patented drugs for such diseases as AIDS and malaria will revive the stalled talks on agriculture and industrial goods.

“The U.S. and EU may have differences…but we are in a position to exert leadership,” said Zoellick. “With so many countries and issues, the real danger is how the complexities could break the whole thing down.”

Lamy acknowledged the outcome of Cancun will be difficult to assess.

“It’s not the start of negotiations and it is not the end of negotiations,” he said. “Some will ask why we are meeting in Cancun if we are not taking definitive steps and the answer is there are 146 chefs cooking [up the fixed menu] and it is complex.”He insisted the Doha Round at the midway point is far ahead of the Uruguay Round, which took seven years to complete and led to the creation of the WTO. Trade officials are hoping to complete Doha in four years.

“The real challenge, and it’s not easy, is to get the framework,” said Zoellick. “If you get the framework [in Cancun], then you can set the goal to get the numbers [formulas on how far to reduce tariffs at certain stages].”

Zoellick said the big question in Cancun is whether developing countries, which dominate the trade talks in sheer numbers, will be willing to make concessions for the good of the global trade body. Many developing countries are pushing for big market openings in agriculture from rich nations, but are wary about lowering tariffs and eliminating subsidies in their own fragile agriculture and industrial markets.

“We all have politics here,” he said. “Are we making points for the domestic audience alone or are we trying to find solutions to bridge the gaps?” he asked rhetorically.

Zoellick seemed to sidestep a question about how close he thought countries would get to bringing their tariffs on industrial products, including textiles and apparel, down to zero.

“At this point in the negotiations we are trying to reach an agreement on the concept of cutting each item by a method to be determined and combining that with the notion of sectorals,” he said. “Take textiles — we will move to zero if others move to zero. I think it is a fair position for our [textile] industry to say if we are going to cut further we have to get other countries to our same level first.”

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